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U.S. grains: Soy jumps on China demand, fund-driven buying

CBOT wheat, corn follow soybeans higher

cbot november soybeans
CBOT November 2020 soybeans with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. soybean futures surged to two-year highs on Wednesday on continued export demand from top global soy buyer China and fund-driven buying, analysts said.

Corn and wheat futures followed soybeans higher, with additional support from a more than four per cent jump in U.S. crude oil prices. Corn and soyoil sometimes follow energy prices due to their role as feedstocks for ethanol and soy-based biodiesel fuel.

Chicago Board of Trade November soybean futures settled up 19-3/4 cents at $10.11-1/4 per bushel after reaching $10.13-3/4, a life-of-contract top and the highest price for a most-active contract on a continuous chart since June 2018 (all figures US$).

CBOT December corn ended up 5-3/4 cents at $3.71-3/4 a bushel after touching $3.72, a six-month peak, in late moves. December wheat ended up 3-3/4 cents at $5.42 a bushel.

Soybeans led the way up, extending gains after the U.S. Department of Agriculture confirmed private sales of 327,000 tonnes of U.S. soybeans to China. USDA has announced U.S. soy sales to China in each of the past nine business days.

Technical buying accelerated as the CBOT November contract pushed above its previous contract high of $10.08-3/4.

“Soybeans lead the grain and oilseed complex higher as fund money pours in… on expectations of a tightening balance sheet as crop yields decline and demand increases in China,” StoneX analyst Arlan Suderman wrote in a client note.

Corn followed soybeans higher. Some traders are considering whether the roughly $1.30-a-bushel rally in soybean futures since mid-August will encourage U.S. farmers to plant more soy and less corn for 2021, a supportive factor for deferred corn futures.

A Farm Futures producers’ survey conducted in late July and released on Wednesday projected a 4.9 per cent rise in U.S. 2021 soybean seedings and an 0.3 per cent drop in corn acres.

“There is going to be acreage competition between beans and corn… We have not seen that for a couple of years,” said Dan Cekander, president of DC Analysis.

Wheat followed the firming trend, with the CBOT December contract rebounding from a three-week low.

Egypt’s state grain buyer, GASC, bought 175,000 tonnes of Russian-origin wheat and 60,000 tonnes of Polish wheat in an international tender.

— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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